The government today announced plans to introduce a minimum wage of £2.50 an hour for Britain's dwindling number of apprentices.

The new rate will apply to those apprentices who are under 19 or are aged 19 and over but in the first year of their apprenticeship. The minimum wage for 18 to 20-year-olds will also increase by 1.9%, or 9p, to £4.92 an hour, while for 16 and 17-year-olds it will increase by 2%, or 7p, to £3.64.

The business minister Pat McFadden said: "I'm glad to see the Low Pay Commission recognising the significant contribution that apprentices make to the economy.

"I hope this will encourage more people to take advantage of this opportunity and invest in their skills by taking up an apprenticeship."

Commission chairman David Norgrove said: "The introduction of an apprentice rate marks an important extension to minimum wage protection across the UK."

However, Dave Prentis, general secretary of Unison, said the £2.50 apprentice rate was "nowhere near enough", adding: "Billions have been pumped into banks, but young people are left suffering from an economic crisis they did not cause.

"We will continue to press for better rates and hope to see a more radical minimum wage rise in the Labour party manifesto, to help young workers' future prospects change from bleak to bright."

While many business organisations who opposed today's increase to the national minimum wage welcomed the government's plans for apprentices, Charles Cotton, of the Chartered Institute of Personnel and Development, said: "It is difficult to see how this increase will help create jobs or offer a boost in training places for unemployed young people. Combining a higher minimum wage with the impending hike in employers' national insurance contributions really would represent a hefty tax on jobs.

"Pricing young people out of work, while also using taxpayers' money to subsidise a youth jobs guarantee, doesn't make sense."